NZ appears to have imported a certain British malaise, best summed up by James Kirkup of the Social Market Foundation: "The structural shortfall in public services arises from an awkward truth of British politics: we want to pay American taxes and expect European services."
PS. As far as the private sector is concerned, the money to invest in the next Weta or Trademe is there. The problem is, most of it's been ploughed into the low-productivity real estate bubble. As your fellow Substacker Bernard Hickey describes it, NZ's economy has become a "housing market with bits tacked on" which is "too big to fail". And a former US Federal Reserve chair once said that "if it's too big to fail, it's too big and needs to be broken up".
So, how do we break up a housing market that's both fragmented and monopolistic?
Thanks for the comments! It was a mistake of the new govt to give tax deductibility of interest back to landlords. Even so, a bank would much sooner lend me money to buy an investment property than to start up a new business doing what I do best and potentially earning income from off shore. I agree with Bernard's point.
Thanks for the thoughtful insights into polling, I admit I hadn’t really considered what the questions and answers delivered. I think what certainly a number of respondents could mean is that they themselves don’t want to pay more tax but rather there is inherent unfairness in the tax system. What the majority want is for the “strong government” to deliver a more even tax regime. This has to come from some form of capital gain system. The problem is that no government in the last 30 years in NZ/AO has been strong and had the conviction to deliver it. Poor government performance directly correlates to poor productivity right?
I think you have a good point. The survey questions are already framed in a certain way, respondents interpret and answer in their own ways – and then there's the framing they're given in media. Questions of government are also open to interpretations and opinions. Think of it as an ongoing conversation, rather than a set of objective facts.
I think we could all answer honestly that we want more spent on social services, and that we don’t want to pay more in taxes. The survey evidently didn’t ask whether we want the former even if it means paying more in taxes.
That's true, Kai. The survey didn't ask people to weigh up any trade-offs. But that makes for a lengthy survey. Anyway, rather than ask them to try harder, I'm beginning to get annoyed with commercial market research companies getting themselves publicity by interfering in political discourse. Should they be told to butt out? GD
The 'have your cake and eat it 2' vibe that the survey picks up highlights a fundamental contradiction in how our democracy works. To get elected politicians promise to solve problems that the majority of voters think are important but typically, few have the actual expertise to make this happen. We seem to have encouraged politicians who are successful in getting support by attracting media attention and staying in the public eye with controversial statements but don't have the skills to govern. Being actually capable of solving complex problems (and actually having the practical knowlege to make change happen) is often missing. With Kiwibuild, Labour simply didn't understand how the housing market works and were ill prepared to get the necessary traction going here (and it wasn't helped by COVID). I suspect that we are going to see much the same with the coalition government with their determination to introduce tax cuts by slashing the public service yet remaining adament that we won't see a declining quality in front-line services. NZ is not alone in this - Rory Steward in his recent autobiography - Politics on the Edge - paints picture of the UK parliament being dominated by the politics of ego and grandiosity combined with very little actual knowledge of (and interest in) the actual business of governing for the people.
Good thoughts, thanks Mark! Do politicians lack the expertise and ability to solve problems and implement solutions? Yes, I agree that they often do. The public service is supposed to advise and implement, and largely they do that, but there's a bit of a problem in the minister–public servant relationships at the moment, I gather! I haven't read Rory's book, but have heard him make the point on his podcast. I've thought about solutions to this problem, but it's not easy in what we call "democracies". And I don't recommend autocracy either! Cheers, Grant
Yes autocracy has little to recommend it but a start to address the above would be a media that held all politicians to account (costings and practicalities of policies) when they made promises at election time, as well as a more realistic public understanding and acknowledgement of, what is actually politically possible. The latter would encourage politicians to be more measured in how they talked about their plans.
Not sure what the military/war/spy/ .. budget is in NZ but in US AND UK it’s a lot ..there they talk about cutting welfare as they increase the military budget
If we considered everything then we could indeed have our cake and eat it .. at the same time as putting the military-industrial complex on notice that their gravy train at our expense is ending.
But of course .. a boy can dream .. can’t he?
PS cutting the war budget isn’t a peacenik play .. it is recognizing that the US hasn’t won a war even with all the money for DECADES .. because we invest in and fight. The wrong wars.
sorry, I know this is US centric and not quite the same here .. but maybe it is.
Thanks for the comment, John, and point taken about destructive and pointless wars. Just for accuracy's sake, though, NZ's defence spending as % of GDP is low.
It's got to the point where our armed forces aren't as helpful in an emergency as they'd like to be. I don't, however, think that AUKUS is a great idea either.
Ya. I am not surprised - as I said - not in the details of defence spending in Aotearoa - but I do know that Devonport can't hold that many ships 😳 ... so yes, understood. Re AUKUS - agree. An example of the 'wrong war' being fought.
NZ appears to have imported a certain British malaise, best summed up by James Kirkup of the Social Market Foundation: "The structural shortfall in public services arises from an awkward truth of British politics: we want to pay American taxes and expect European services."
https://www.politico.eu/article/uk-politics-liz-truss-boris-johnson-britain-broken/
PS. As far as the private sector is concerned, the money to invest in the next Weta or Trademe is there. The problem is, most of it's been ploughed into the low-productivity real estate bubble. As your fellow Substacker Bernard Hickey describes it, NZ's economy has become a "housing market with bits tacked on" which is "too big to fail". And a former US Federal Reserve chair once said that "if it's too big to fail, it's too big and needs to be broken up".
So, how do we break up a housing market that's both fragmented and monopolistic?
Thanks for the comments! It was a mistake of the new govt to give tax deductibility of interest back to landlords. Even so, a bank would much sooner lend me money to buy an investment property than to start up a new business doing what I do best and potentially earning income from off shore. I agree with Bernard's point.
Already, someone in Oz has taken matters into his own hands. And he's thought out loud that NZ locations will follow.
https://au.finance.yahoo.com/news/controversial-plot-to-get-back-at-unethical-aussie-landlords-by-finding-abandoned-homes-082201843.html
Nice! You'll like this:
https://www.theguardian.com/lifeandstyle/2024/mar/19/end-of-landlords-surprisingly-simple-solution-to-uk-housing-crisis
Thanks for the thoughtful insights into polling, I admit I hadn’t really considered what the questions and answers delivered. I think what certainly a number of respondents could mean is that they themselves don’t want to pay more tax but rather there is inherent unfairness in the tax system. What the majority want is for the “strong government” to deliver a more even tax regime. This has to come from some form of capital gain system. The problem is that no government in the last 30 years in NZ/AO has been strong and had the conviction to deliver it. Poor government performance directly correlates to poor productivity right?
I think you have a good point. The survey questions are already framed in a certain way, respondents interpret and answer in their own ways – and then there's the framing they're given in media. Questions of government are also open to interpretations and opinions. Think of it as an ongoing conversation, rather than a set of objective facts.
I think we could all answer honestly that we want more spent on social services, and that we don’t want to pay more in taxes. The survey evidently didn’t ask whether we want the former even if it means paying more in taxes.
That's true, Kai. The survey didn't ask people to weigh up any trade-offs. But that makes for a lengthy survey. Anyway, rather than ask them to try harder, I'm beginning to get annoyed with commercial market research companies getting themselves publicity by interfering in political discourse. Should they be told to butt out? GD
The 'have your cake and eat it 2' vibe that the survey picks up highlights a fundamental contradiction in how our democracy works. To get elected politicians promise to solve problems that the majority of voters think are important but typically, few have the actual expertise to make this happen. We seem to have encouraged politicians who are successful in getting support by attracting media attention and staying in the public eye with controversial statements but don't have the skills to govern. Being actually capable of solving complex problems (and actually having the practical knowlege to make change happen) is often missing. With Kiwibuild, Labour simply didn't understand how the housing market works and were ill prepared to get the necessary traction going here (and it wasn't helped by COVID). I suspect that we are going to see much the same with the coalition government with their determination to introduce tax cuts by slashing the public service yet remaining adament that we won't see a declining quality in front-line services. NZ is not alone in this - Rory Steward in his recent autobiography - Politics on the Edge - paints picture of the UK parliament being dominated by the politics of ego and grandiosity combined with very little actual knowledge of (and interest in) the actual business of governing for the people.
Good thoughts, thanks Mark! Do politicians lack the expertise and ability to solve problems and implement solutions? Yes, I agree that they often do. The public service is supposed to advise and implement, and largely they do that, but there's a bit of a problem in the minister–public servant relationships at the moment, I gather! I haven't read Rory's book, but have heard him make the point on his podcast. I've thought about solutions to this problem, but it's not easy in what we call "democracies". And I don't recommend autocracy either! Cheers, Grant
Yes autocracy has little to recommend it but a start to address the above would be a media that held all politicians to account (costings and practicalities of policies) when they made promises at election time, as well as a more realistic public understanding and acknowledgement of, what is actually politically possible. The latter would encourage politicians to be more measured in how they talked about their plans.
Totally agree! NZ has some maturing to do in how we discuss and debate public policy. We need to lead by example, Mark!
Not sure what the military/war/spy/ .. budget is in NZ but in US AND UK it’s a lot ..there they talk about cutting welfare as they increase the military budget
If we considered everything then we could indeed have our cake and eat it .. at the same time as putting the military-industrial complex on notice that their gravy train at our expense is ending.
But of course .. a boy can dream .. can’t he?
PS cutting the war budget isn’t a peacenik play .. it is recognizing that the US hasn’t won a war even with all the money for DECADES .. because we invest in and fight. The wrong wars.
sorry, I know this is US centric and not quite the same here .. but maybe it is.
Thanks for the comment, John, and point taken about destructive and pointless wars. Just for accuracy's sake, though, NZ's defence spending as % of GDP is low.
https://data.worldbank.org/indicator/MS.MIL.XPND.GD.ZS?locations=NZ
It's got to the point where our armed forces aren't as helpful in an emergency as they'd like to be. I don't, however, think that AUKUS is a great idea either.
GD
Ya. I am not surprised - as I said - not in the details of defence spending in Aotearoa - but I do know that Devonport can't hold that many ships 😳 ... so yes, understood. Re AUKUS - agree. An example of the 'wrong war' being fought.